Now you can consider what the initial expense is, divide that by $7,200 and have your simple payback in years.

What should be done is the expected remaining life of all replacement systems taken and divided into the replacement cost and that number used as a “reserve” expense item to be subtracted from revenue.  

@Jeff Chisum yes we did to divide it into two units.

For easy numbers let's say the 10 acre lot is $100k and I can sell each 1 acre lot for $25k financed over 5 years once divided.

I'd just do the straight line method - cost basis on the dwelling divided by 27.5 for a residential property. 

This will vary based on region but in general 2 – 5 points, 9% - 16% APR (meaning this is the annual rate so divide it by 12 to get the monthly interest amount), and documents fees can be from $600 – $1,900.

So at 50% expense ratio, $75k negative equity divided by $2232 = 33.6 years to recover the negative cash flow.

., Since it's your first deal, I'd recommend forming a basic multi-member LLC with an operating agreement that clearly spells out each person's ownership, capital contributions, responsibilities, and how profits (or losses) will be divided.

. $30,000 divided by $4000 = 7.5 so you have seven and a half months to break even.

Divide that amount by 3 and ask your roommates if they are comfortable with that amount.